Latvian Association of Large Families has turned to society and Saeima deputies, urging them to hear the cries of the families that perform an important duty every day – take care and raise the next generation. It would seem that families with children have been forgotten in the budget for 2025 and the planned labour tax reform.
Since 2021, the risk of poverty in families with more than one child per breadwinner has been increasing in Latvia. Risks can only be mitigated by increasing income in these families by increasing income tax benefits for dependants, increasing family benefits, or more co-financing universal services for all children, such as school lunches up to 12th grade.
“Listening to representatives of our ministries, you get the impression they represent different governments, because the Ministry of Finance points to the Ministry of Welfare, Ministry of Welfare points to the Ministry of Education and Science, and the latter then points back to the first. Families have ended up unheard and surrounded, as they do not have an influential lobby like the social partners recognised by the government – employers, trade unions or the pensioners federation,” according to Latvian Association of Large Families.
Raising only the tax-free minimum for workers and pensioners, without increasing benefits for dependants, in a household without dependants, each of its members will gain much more additional income than a household with children. This will only serve to increase inequality. This is especially true for recipients of small wages. For example, a mother with a gross salary of EUR 740 and one child will receive an additional EUR 0.92 as a result of the tax reform, but a woman with the same salary and without children will receive an additional EUR 12.09 as a result of the reform, while a pensioner with a pension of EUR 740 will receive an additional EUR 48.
The position from the Ministry of Finance is especially cynical, as the biggest portion of tax benefits will “land in the pockets of wealthy parents,” the association stresses.
We’re digging an even deeper demographic hole!
Unfortunately, the 2025 budget will not see any increased income tax relief for children, no increase in child-oriented benefits, nor an additional state-paid universal service that could reduce families’ daily expenses related to children. On the contrary, the Ministry of Welfare is proud of the million savings in benefits due to the drop in the number of newborns and predicts a dramatically low number of 12 000 newborns for the next four years.
Janis Reirs, Chairman of the Budget and Finance Committee of the Saeima,
expressed regret at the meeting on the 22nd of November that the public has the opportunity to follow up on how the policy is being developed.
We consider it an underrated opportunity to listen to audio recordings of meetings and hear the public servants and cynicism and demagogy with which they sweep away proposals to reduce the risk of poverty in families or ridicule working parents, calling them schemers and their children business projects. The theoretical increase in the number of newborns is called a threat to the budget and an uncontrollable increase in costs.
Such rhetoric only deepens the gap between state institutions and families, emphasises the association.
“The catastrophic drop in birth rates in Latvia in recent years is not an accident – it is also a reflection of the helplessness and financial despair of families. How can families be motivated to take responsibility for creating new life if they are ignored in their own country? The state policy of having families bring a child into the world has failed. When it comes to redistributing budget funds in favour of the largest electorate of politicians – seniors, there are instructions about the solidarity responsibility of society, but solidarity with families raising the future of the country is forgotten.
We urge members of the Saeima to develop a family-friendly tax and benefit policy, to see and understand the burden of adult household costs in families with children, not to be limited to the selective information and opinion provided by the ministries. Decisions must be made by you, not officials. Every family raising children is a national value, not a burden,” stresses the Latvian Association of Large Families.